The Walmart Effect – Competition is NOT Just Cost

Exclamation MarkAfghanistan and the fraudulent President Biden have had me thinking about the Walmart effect over the last three days or so, and I cannot help but think there are some lessons to be discussed.  More to the point, the lines of congruence between the Walmart effect and the current political situation possess the potential for correcting course and saving America.  Not just America, but representative governments worldwide.  The Walmart effect is a global pandemic more powerful and pernicious than COVID ever will be, and we need to at least recognize this truth.

What is the Walmart Effect?

Working DollarWalmart has always competed on price.  As if there was nothing else to compete upon.  Lowest prices, regardless of the junk sold, price mattered more.  Hammer the price to nothing in every aspect of the supply chain.  Hammer the costs of doing business to lower costs to consumers.  Cheapen and eliminate packaging, “helping the environment,” and reduce costs.  Force suppliers and vendors to absorb traditional costs stores assumed, lowers costs, and increase profit margins.  Everything in the Walmart model is about lowering consumer costs, and Walmart has been very successful at twisting arms and breaking heads to reduce costs.

But, what has been the result of focusing just on costs the consumer sees?  First, lots of hidden fees have become observed.  Some of which was a good thing, most of which have become more obscure, and this is not such a good thing.  Worse, think of the fuel fees and delivery charges you now pay for having a pizza delivered.  Once a fee is begun to be charged, it is very difficult to stop charging the fee.  The Walmart effect passes costs onto consumers and shows the consumer why they are paying a higher fee, then the consumer accepts the fee as the cost of doing business and does not complain.  Have you ever stopped to ask yourself why there are so many fuel fees and why they became apparent almost overnight; I promise the cost of fuel was not the reason, the Walmart effect was the reason, and making money is the purpose.

Pigeon RevengeSecond, quality and service have disappeared in competition.  Safeway, as a grocery store, has excellent service; but they cannot compete on service and quality because the Walmart effect has changed these two adjectives to be synonymous with higher consumer costs.  Believe it or not, the grocery store model has not changed in the last 200 years. Walmart changed society to believe everything was about competing on consumer costs, and the rest of the competition has played along.  Want to know a secret, you as a consumer are being deceived into believing that Walmart has the best prices, but when quality is added to the picture, Walmart is selling you junk.

Third, all big-box retailers employ science to lure you into their stores.  Bright lights, color schemes, smells, all carefully crafted to keep you in the stores.  Musical shelves where products move from day to day in the store to lengthen your time walking the aisles.  Everything is carefully planned and organized to influence you to spend more money.  Now, back to Walmart and the claim about junk.  Some of the items in Walmart are end runs of name-brand products.  Some of the items are cheap knock-offs.  Some of the fruit and vegetables are almost spoiled or completely raw.  Yet, Walmart pushes those products for sale anyway.  Purchasers for Walmart are under strict order to find products for sale at the lowest costs.  After working with a manufacturer supplying big-box retailers, I can tell you that many manufacturers hate dealing with Walmart because of the Walmart costs of doing business.Lemmings 3

Fourth, all big-box retailers represent a plethora of manufacturers trying to get their products in front of customers in the easiest way possible.  This is a truth, and a problem, for the manufacturers, are always competing, think Kraft and General Mills, Post, and other brand names.  These manufacturers compete for every dime you spend; they compete for shelf space; they compete for advertising space; they compete for every second you spend in the store, and dealing with these manufacturers is like herding long-tailed cats in a room full of rocking chairs.  A loose conglomeration controlled by access to the customer portal, Walmart manages an extensive customer portal, Safeway, Home Depot, Lowes, etc. All control certain customer portals and commit to selling XX amount of goods for the manufacturers.  But, this is not “friendly” competition by any stretch of the imagination.  One manufacturer scores a benefit that improves their access to customers over another manufacturer; you can bet another manufacturer will be competing to repeat the performance.  All of which increases costs to the consumer in hidden fees, generally through rebate scams, BOGO “deals,” or my favorite “Rollback prices.”

Interestingly, the political situation in all representative governments is similar to America’s current situation.  A phenomenon I find both alarming and intriguing, but one with enormous potential to be taken advantage of to correct and save representative governments.  The one thing cost-focused competition cannot do is compete with service.  When customer service is truly the focus, cost competitors melt away.  Therein lay the answer, but we must first describe the lines of congruence before we can discuss solutions.Lemmings 5

Consider point one of the Walmart effect, competing on price both hides and reveals costs.  Every representative government worldwide has an entire industry working 24/7, working tirelessly to plasticize words where taxes are concerned to make progress bad and regression good.  Regressive taxes are considered good, even though they kill jobs, ruin lives, cost more, and eventually lead to the ruination of liberty and freedom.  Progressive taxes are hailed as bad, even though they cut government costs, increase liberty and freedom, allow people to keep more of their hard-earned money, and force the government to live on a budget.  While the tax language has been around longer than Walmart, the truth is, the Walmart effect has improved the tax language to the point that representative government can rob you blind, and you never know.  Just like that fuel surcharge on pizza receipts, after the cost of ingredients for the pizza skyrocketed.

Point two of the Walmart effect; where has customer service gone in government?  Since I was a kid, citizens’ accessibility to elected officials has dropped like a sack of lead.  Worse, we have seen active animosity from the elected officials towards the citizenry.  Mayors allow terrorist mobs to destroy public and private property without regard, mobs and gangs to rule, entire sections of cities lost to civilization, and elected officials do not care until they utter empty words in an election campaign.  Enter a government office for a permit, license, get a question answered, etc., and you are treated like scum, and the bureaucrat is doing you a tremendous favor by granting you an audience.  Now, how do you honestly feel when you walk into Walmart and ask an associate a question, provided you can lasso an associate to ask?

Gravy Train 3On the third point in the Walmart effect, politicians spend enormous amounts of effort to use marketing science to play upon emotions to get and keep an audience.  The same marketing science employed to keep you in a retailer making purchases keeps you “connected” to your political party.  Worse, because there are familial traditions in being one political party or another, there remain tighter ties to a political party.  These strings are played to the fullest to bind you ever tighter, so you do not use conscious thinking when voting the party line.

Finally, we come to the fourth Walmart effect, the one with the most pertinence to current political dogma, the bundling of obscure groups into a ruling party.  I have never been shy about admitting that two-party political rule is terrible for America.  I am all for having 10-15 separate major political parties; in the confusion generated by the many voices, better governance occurs, mostly.  I respect the Israelis for their political system with their separate and ungainly political parties because of the need to gain coalitions and be very connected with and responsible to the people in those coalitions and the citizens they represent.  Recognizing that the political system does not always work, a robust system of codified laws is mandatory to keep the government in check and accountable to the people.

Bobblehead DollFrankly, I do not care what side of the political spectrum you come down upon.  What matters to me is how your representative governs.  Once an elected official of a representative government gains office, they cannot simply think they only represent that political party while in office.  Thinking this way is the epitome of the Walmart effect and stems from competing on cost alone.  Worse, thinking that the representative only represents those who placed them in power places that elected representative into a position to abuse their office.

Using others is what Walmart has done because they control such a vast portal to customers, and the manufacturers have been paying a steep price in more than dollars and cents ever since.  Unfortunately, so have the customers.  The harm to the manufacturers is delivered to the end consumer, and Walmart does not care as they are just a portal through which a manufacturer sells goods.  The same thing for the politician, all of society is harmed when a politician can be purchased and influenced; when harm comes to one person because of their political leanings, everyone suffers.

Knowledge Check!Therein lay the other answer to the Walmart effect, recognizing that we must join together, or fall individually, an unpitied sacrifice in a contemptible struggle since we are all interconnected.  Service and joining together are the only paths forward.  We must not allow divisive political agendas, carefully crafted scientifically marketed political pogroms, and slick groomed politicians to sway us from the important points of freedom, liberty, and a pursuit of happiness.  We cannot afford the governments that have ballooned and festered over the last 60-years.  We cannot afford the Walmart effect; the cost is just too great!

© 2021 M. Dave Salisbury
All Rights Reserved
The images used herein were obtained in the public domain; this author holds no copyright to the images displayed.

Why Should Your Customers Remain Customers?

Bobblehead DollMy wife is mad at me; I was relating an email survey experience where a financial institution had sent me a customer service survey.  I described the truth, I have no reason to remain a customer and feel less than enthused at remaining a customer.  My wife fearing I had been insulting, derogatory, or denigrating, got mad at me.  I explained my position and how I had answered the rote questions, and she is still not happy.  But, her position and my position bring up an interesting point, centered around the following question, “Why should a customer remain a customer?”

Use My Name!

Daily I receive programmed emails from multiple companies.  Do you know how I pick the ones I want to do business with?  They know my preferred name and use it!  What an incredible concept; since the early 1990s, we have had the technology to put in names, create mailing lists, and use people’s preferred names, and businesses still struggle with this concept.  Why?

LookI have several titles, want my business, know and use my titles.  Pick one, and use it!  How can a company claim they “know their customers” when that company cannot use the customer’s preferred name or title in addressing that customer?  I have worked hard to earn a Ph.D.; I do not expect everyone to call me “Dr.,” but it sure as anything beats being called “mister” all the bloody time.  Worse, I still hold several ranks and positions that come with titles. I could be addressed using them, but even with a preferred name on many company customer profiles, I get that lazy customer service representative that calls me Mr. Salisbury!  Guess what company I am going to ditch at the first opportunity?Shhh----Don--t-Say-A-Thing--Just-Listen--Don--t-Talk.jpg (500×273) | The beauty and danger of ...

On the topic of names, if I say, “everyone calls me Dave,” and you continue to call me “Michael,” “Mike,” or “Mr. Salisbury,” you are either not listening, or your company has the worst policies for addressing customers.  Guess what company I will end my business relationship with post-haste?  I have given permission to use a preferred name, use my name.  Listen to me!

Listen!

Job Interview Cartoons ~ Silly BuntActive listening can be faked!  Customer service agents, I know active listening can be manufactured, I have been a customer service agent, I know your stress, I know your job, and I know your problems.  Thus, to your bosses, I appeal; stop the active listening drama!  If you are not stressing reflective listening to your employees, where they and the customer reach a mutual understanding, you are not doing your job leading customer relations!

My wife claims that conclusion is “Too harsh.”  I disagree vociferously.  Here’s why!  Remember how I just related how I had informed customer service agents, “everyone calls me Dave,” and the agent continued to call me everything but my preferred name.  Failure to listen remains the number one customer complaint for a reason; the agents are not listening to reach a mutual understanding.  Too often, they are not even attempting to listen actively but are listening to respond, responding to the voices in their heads and not the customer!Joke of the Day | Joke of the day, Funny quotes, Single words

Do you want better customer survey responses; try listening, then acting, then listening again.  Not speaking; listening, acting, listening, acting; it’s a pattern worth doing!  Yet, too often, what is the pattern found, maybe listening, speaking, maybe listening, token action, maybe listening, half-hearted action.  Wait for the customer to become frustrated and go away.  Guess which company I am going to be ending my business relationship with quickly?

Respond!

AP 20.96 Short-Answer Questions (SAQ) - Bello's Reference Page - Use GOOGLE CLASSROOM for all ...I have four companies who I have informed (several times) I no longer can do business with them.  They continue to send me emails asking for my business for old properties and cars I no longer possess.  Listening is but half the answer; you must also respond with definitive action.  How many times does a customer have to relate to your business they have moved?  I did business with a windshield repair company in Phoenix, AZ.  Good company, good service, but for the next three years, I received calls from them monthly, and I had moved out of their service area.  They were told this month after month, I was promised month after month this was the final call, and month after month, I received another call.  Guess whose recommendation I deleted online?

People ProcessesBusiness processes matter; honoring your word matters, displaying trust, integrity, and fulfilling a promise made all matters in the customer relationship long before the product or service is discussed.  Yet, how often are these issues on shaky ground, before the ink is dry on the service contract or the receipt for goods?  I have a cell phone provider I detest; I long for the day I can finally walk free of this provider and never look back.  Because their customer attention is deplorable, I feel used and abused every time I interact with this company.  I have the same problem with my current Internet provider.  When your customer service is so deplorable, you have to climb to become terrible; there is a problem that colors, signage, marketing, and gimmicks cannot fix!

Why Would I gladly Pay a Higher Price; Service!

Skillet Mac and Cheese with Crispy Breadcrumbs Recipe - Southern LivingI was in the supermarket, my wife asked for a treat.  To her, a treat is a bowl of deli mac & cheese, potato salad, or a bag of potato chips.  As I was in the deli and they had her mac & cheese, I bought mac & cheese.  My wife was shocked, I paid, what to her was an exorbitant price for the mac & cheese, but I was glad to pay the price.  The counter worker wrapped the mac & cheese package in plastic wrap to protect it from spilling, was pleasant, remembered me from a previous visit, and made my day.  The service was well worth the extra cost.

I kept going back to this store, making purchases long after this deli person was transferred to another store closer to their home because the service level did not go down.  Thus, I remained satisfied to pay extra for the service I received.  Walking on a cane, with labored breathing, and having a service representative walk with me, not ahead of me, so I feel like I have to race, is a significant service I would gladly pay more for.  I felt respected and remembered from visit to visit, even if I was sporadic in visiting for over a month.2mm to Sales Mastery | Customer Obsession: Creating "Wow" Moments That Leave a Lasting Impression

Long before the product or service costs are discussed is the customer experience.  If the customer experience fails, you can have the coolest products and the best access to services and fail because you forget the customer experience!  Getting back to the financial survey I just completed, it was full of Likert-style scale questions.  If your company employs a Likert question on a survey, you need a follow-up self-directed qualitative question to explain directly after.

Likert-Style Surveys

Likert-style questions are a quantitative researcher’s bread and butter, showing the relationships between agreement and disagreement on a broad scale.  Generally, on a scale of 1-10, these questions and scales have come to be represented by emojis, colors, statements, and more as technology has advanced.Top 10 Likert Scale Examples for your next survey! | QuestionPro

I completed 15 Likert-styled questions before I was asked why I rated the company as “Neither liked or disliked, neither favorable nor unfavorable.”  Okay, so quantitative data is easier and less expensive to collect, collate, and report.  But, if your customer survey is only collecting qualitative or quantitative data, you are only collecting half the story and none of the customer experiences!  However, you cannot simply ask ½ the questions qualitative and ½ the questions quantitative and expect anything but GIGO.  Careful planning is key to customer survey results worth your time and the customers time!Likert scale questions, survey and examples | QuestionPro

A customer satisfaction survey should first be an instrument of dedicated action!  Where your best and brightest in customer relations work to analyze, report, and propose efforts to satisfy the customers.  They investigate survey findings.  They respond to survey questions and concerns, address real people, and produce tangible results.eCommerce Customer Surveys | An Ultimate Guide 2021

A customer satisfaction survey is not the time, nor the place, for cute emojis and colorful pictures depicting customer attitudes.  Can the customer survey be more than black and white; naturally.  Remember that the customer survey is not where you go to flash and spin; this is where the customer goes, tells the truth, and expects action, not to be played with.  If the customer takes the time to complete a survey, there is a reason, find the cause, know the customer, and win.

Knowledge Check!These are but three basics, fundamental points at the start of the customer relations journey.  If you cannot get these three points right, the rest of the trip will be short, painful, and not fulfilling for you or your customers.  Worse, the experiences will be remembered, and people have this nasty habit of not forgetting bad experiences.  Why do the majority of people despise the DMV; because the majority of customers have experienced the most frustrating issues of their professional lives at the hands of the DMV agents.  Governments abuse their customers, which is as bad as customer interactions get, and everyone feels betrayed when the government and bureaucrats use them.

You are in the private sector; you have competition; your first question daily should be, “Why should my customers remain, my customers?”  When you answer this question, your customers will hear the answer loud and clear!

© 2021 M. Dave Salisbury
All Rights Reserved
The images used herein were obtained in the public domain; this author holds no copyright to the images displayed.